Lean Consumption meets Lean Provision

Lean Enterprise Academy www.leanuk.org1

Lean Consumption Meets Lean Provision

Ricardo LopesLean Process ManagerGrupo Fernando Simao


Grupo Fernando Simao• Family business founded 1947, Oporto• 3rd largest car dealer group in Portugal

• Represent 16 brands in total • Including some in a joint-venture operation

• Largest seller of Opel in Portugal• Recently expanded into Spain (another 5 brands)• Expect to sell 9000 new cars in 2005 (5% share)

• 950 people in 38 businesses including:• 14 used car showrooms, body-repair shops,

parts wholesaling operation, property company


How our Lean journey began

• Oct 99: Pedro Simao to ICDP seminar• Kiff / Brunt: Lean Dealer presentation

• Dec 99: Simao & Kiff met in London• Vision of ‘Hunting to Farming’

• Jan 00: Simao request for help• “How do I implement Lean?”

• Mar 00: Dave Brunt visit to Oporto• Walked the process. Masking tape• Taught value stream mapping (Provision)


What we learned

• We were optimising each separate area• But cars waited between each area

• Our housekeeping was poor• Much more than rolls of masking tape!

• We also:• Launched jobs by loudest customer• Had no idea if we were behind or ahead• Pushed work through the shop


What we needed to do

• See the process as a whole• Try to flow vehicles• Not launch any jobs until had all parts• Create a process control board• Separate jobs from simple to complex• Measure our Customer Fulfilment

• “Right first time on time, every time”• Root-cause reasons for failure to fulfil


What we then plannedfor the next 12 months

• Used car preparation process• Prepare & deliver a car to order in 3 days

• Body repair• Reduce waste, reduce lead times by 30%

• After-sales• Raise customer fulfilment to 80%

• Parts process• Develop a JIT system to support the above


Example 1: Used CarsAim: Prepare to order in 3 days

• ‘Bodyfit’ facility • Designed by ‘experts’• 3x too big, wrong layout

• Lean improvements:• Value Stream Map, Takt Time• Process Activity Maps, Standardised Work• All aimed at developing Flow and Pull

• Sales interface: sell from sample• Stock visible to salesmen who ‘pull’ car


Value Stream Map and Takt


Process Activity Mappingto achieve standardised work


Flow and Pull at Bodyfit

Visual signal: ‘take this one next’


Interface with Sales

Small showroom, sell from sample


Example 2: After-Sales Aim: Raise customer fulfilment to 80%

• Dealer workshops• Were poorly planned• Had poor fulfilment

• Lean improvements:• Pre-diagnosis of cars• Planning board• Jobs allocated to teams• Standard work on service jobs• All supported by 5S


Pre-diagnosis of cars


Planning boardsAllocating jobs to teams


Standard work and 5S


Measuring fulfilment


Example 3: Parts Supply Aim: Support the Value Streams JIT

• Each dealer had its own stock of parts• Result: too much wrong stock, expediting• Customer fulfilment failure – and cost!

• Lean improvements:• Centralise parts stores for main brands• Centralise ‘consumables’ stores• Frequent, JIT deliveries each day• Minimise parts at dealer workshops• Automatic replenishment by supplier


Centralised parts JIT delivery


Centralised consumablesJIT delivery


Lean Provision: Not Enough Need Lean Solutions

• Lean: customers happier, more profit• But still not perfect for customers

• Strategic objectives: • 100% customer’s motoring spend for life! • Retain all cars of the brands we sell

• Depends not only on Lean Provisionbut also on the other element of the Hunting to Farming concept:• Customer Account Management


Customer Account Management Team

• Objectives: • Win 100% of

motoring spend• With Lean process,

build lifetime loyalty• Base: Simao HQ

• Managed with visual boards + database• Team of 10, focus: high-mileage drivers

• Huge increase in loyalty and profit


Current Status & Conclusion

• Not all complete in 12 months• But all projects were in operation

• Since 2001 continuously improving• And extending to other parts of the group

• Now centralising parts for all brands• Centralising body repair too

• More space for more sales and after-sales!

• Lean and Customer Account Managers• Core part of our ongoing strategy


Lean Consumption Meets Lean Provision

Ricardo LopesLean Process ManagerGrupo Fernando Simao

Thank you!

Education

Lean Consumption meets Lean Provision